Buy or Rent: Cheaper to Own in 80% of Big Cities

rent vs buyAttention, big-city dreamers: Consider your options before signing the lease on that slummy one-bedroom. Buying a home is now cheaper than renting in 80 percent of the largest U.S. cities, according to a recent survey.

Real estate website Trulia recently released its quarterly Rent vs. Buy Index, which compares the monthly cost of a two-bedroom apartment with median home list prices in 50 of the largest markets in the nation. The index is arranged into three categories: cities where owning is cheaper, cities where buying is cheaper, and cities where buying may be more expensive, but should be judged on a case-by-case basis.
Of course, that most coveted of markets, New York City, remains at the far end of the spectrum, where renting is still more affordable than buying (if you can call this living). Fort Worth, Texas, came in a distant second.

Among the cities where buying makes the most sense, several western states dominated the list. Las Vegas, one of the worst hit cities in the wake of the housing bust, ranked at the top of the list, followed by Arlington, Phoenix and Fresno.

It should be noted, however, that the index should only be used directionally. While Las Vegas ranks at the top of the list for most affordable city to buy a home, it remains mired in distressed properties that could keep property values down for years to come. By one recent estimate, the City of Second Chances won't fully recover until 2032.

But if you're the sedentary type, cheap homes and low interest rates may be all you need to settle into one of these bargain burgs. Rolling stones, though, need not apply.

See an illustration of the Index map below.

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